ENERGY & OFFSHORE | Staff Reporter, Singapore

Noble Group Q1 losses shrank 45% to US$71.55m

Disposal of its assets resulted in the retirement of US$3b revolving credit facilities.

Noble Group's losses for the first quarter of 2018 shrank by 45% from US$129.35m last year to US$71.55m. Revenue was down by 39% to US$1.21b.

According to its financial statement, its restructuring expenses hit US$19.15m, whilst its losses from its discontinued operations hit US$336m.

Noble Group recorded a group tonnage of 17 million tonnes and operating loss from supply chains of US$44m.

Within the period, the company completed the sale of Noble Americas Corporation (NAC) and the wind-down of certain remaining Global Oil Liquids working capital balances within Noble Clean Fuels Limited (NCFL). These concluded the asset disposal programme, resulting in the retirement of US$3b in senior secured borrowing base revolving credit facilities, and approximately US$525m in net proceeds.

Also read: Noble bows out of paying for US$1.1b revolving credit facility

Noble said approximately 85% of existing senior creditors have acceded to the restructuring support agreement (RSA), and Noble Holdings Limited, the company’s largest shareholder, has given an irrevocable undertaking to support the RSA.

Also read: Goldilocks pushes Noble to reveal terms with financial adviser

"Global commodity prices strengthened in 1Q 2018, supported by both growth in demand and factors affecting supply such as production cuts and economic sanctions. However, the Group’s performance continues to be impacted by the ongoing constraints on liquidity and availability of trade finance to support its operations," Noble commented.

Its freight business had its volume slashed by 21% due to "seasonally weak freight markets."

Moreover, operating income from supply chains was positive, after adjusting for non-cash losses due to contract-specific performance reserves which were recorded in 1Q 2018 against certain net fair value gains on commodity contracts and derivative financial instruments.

"Realisation on the Group’s portfolio of long-term physical contracts was also positive during 1Q 2018, with contributions from each of the Energy Coal, Carbon Steel Materials and Metals businesses. The Group’s Jamalco joint venture also delivered a solid contribution during 1Q 2018 in the stronger price environment," it added.

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